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Welcome to the BDC agri blog. Here you will find reports from some of the events we attend, as well as Greg's popular weekly view of the UK milk and whey powders market:

 

"Many years ago, I got my first job in the dairy industry, as class milk monitor at Tollesbury Primary School.
I thought it was a job for life, but sadly Margaret Thatcher famously ‘snatched’ free school milk,
and the nation’s health has suffered since. Fifty-four years later, I am still musing on the dairy industry,
with an irreverent view of politics and currency ..." G
reg Dunn


There is some good news, but not much. Namely, since our politicians have rediscovered their liking for a good party whipping, they’ve inadvertently put a bit of backbone back into sterling, and now even the blowhards seem to accept at least some postponement in leaving the EU. Still, a cent’s a cent and that has taken some of the sting out of a hike in sweet whey prices.


The old seesaw between whey and skim is back in action. Putting aside quite where 80,000 tonnes of SMP disappeared out of intervention to, the €300 hike in SMP values has focussed the minds of anyone with a drying tower, and thus whey has become less attractive to dry, so whey is ratcheted upwards, now up €60 in six weeks, half of that in the last week.


Now whey is technically becoming a bit shorter in supply, possession of booking dates is more important than predicting when the market will break, so a rolling month/six weeks cover seems the safe option.

 

BDC agri is the UK broker for Lacto Production milk and whey powder products. For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com


The milk powder market is about as organised as British politics at the moment.


Taking skim milk powder first, 80,000 tonnes have been sold out of intervention during the last week, at prices between €1554 and €1676 per tonne, taking the total sold in the last three months to near 200,000 tonnes, and leaving only 22,200 tonnes left in EU stores.


Whilst EU accountants are grateful for the extra bunce over the €1300 minimum sale price, the huge question remains, where is the demand for this extra tonnage, and how long can the market defy gravity and collapse?


Whey powder has ticked up another €10 and nothing else in the milk powder blender’s arsenal of raw materials gets any cheaper, so the hand-to-mouth buying this market backdrop generally dictates could well sustain the continued rise for some weeks yet …

 

BDC agri is the UK broker for Lacto Production milk and whey powder products. For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com


Happy New Year.


Sweet whey ticked up €10 in the Netherlands, but remains unchanged in France, whilst traders struggle to get out of bed after the Christmas break. Cheese production remains buoyant, so supplies remain in balance with demand. Whilst skim milk continues to defy gravity, sweet whey is feeling little impetus to compete, so is likely to hold on to December’s modest gains until later in the month, possibly even later in the quarter.


Skim milk powder continues its upward march, almost pointing to a possible cartel, given the tonnage available and traders unwillingness to offer. The game can presumably go on a little while yet, but surely this makes the collapse all the more precipitous, when it comes? The old adage that the tops and bottoms of markets were made for fools isn’t much help in identifying those chart points, but as every buyer remains hand-to-mouth, spot demand is the only interest, and wave the traders are surfing just gets higher. All waves break, but how far is this one from the beach?


There have been notable problems with transport within and out of France in the last month, exacerbated by les gilets jaune, but hampered by strikes at some French ports and wild weather in the Channel and even though all three issues have receded, transport firms are still trying to play catch-up.

 

BDC agri is the UK broker for Lacto Production milk and whey powder products. For further information and prices, contact Greg Dunn on 01206 381521 or g.dunn@blackdiamondcommodities.com

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